Justice nixes HBC, Clear Channel dealBroadcaster owns 26% stake in the Spanish-language station owner, claims rule's being applied retroactively 6/18/2000 08:00:00 PM Eastern
Clear Channel Communications Inc. will continue to try to sell radio stations to Hispanic Broadcasting Corp. despite the Justice Department's thumbs down on a $127 million deal between the two companies.
HBC said last Monday that Justice had killed the deal because Clear Channel owns a passive 26% stake in the Spanish-language radio broadcaster-and because Justice required Clear Channel to divest the stations in order to meet FCC ownership caps and complete its $23.5 billion merger with AMFM Inc.
Justice spokeswoman Jennifer Rose did not return calls concerning whether Clear Channel can do future deals with HBC or whether the decision applies to other radio companies.
Even Clear Channel President Mark Mays doesn't know the answers to those questions. "I certainly think [Justice] would like to [continue to] apply it," he says. But, "if we ever got into a fair fight with Justice"-in other words, if the AMFM merger weren't pending-"it's something we could actually win."
"We had hoped that [the Justice Department] would reach a decision on the merits as opposed to, in our view, creating a new rule and applying it retroactively to HBC," HBC's CEO McHenry T. Tichenor Jr. says in a news release. As HBC understands it, he says, the action is not applicable to any other situation.
Indeed, Justice's action "does not disallow" future deals with HBC, says Randy Palmer, Clear Channel vice president of finance and investor relations.
As of last Thursday, Clear Channel had not announced new deals for KKFR(FM) Glendale/Phoenix, Ariz.; KXPK(FM) Evergreen/Denver, Colo., and KEYI-FM San Marcos/Austin, Texas. But the buyers were expected to be Emmis Communications Corp. in Phoenix and Denver and radio veteran Frank Wood in Austin.